WORLD TRADE  
ORGANIZATION  G/SCM/N/186/JAM 
G/SCM/N/192/JAM 3 July 2009 
 
(09-3246) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1 of the  
GATT 1994 and Article 25 of the Agreement on  
Subsidies and Countervailing Measures  
 
Continuation of Extension under SCM Artic le 27.4 of the Transition Period for  
the Elimination of Export Subsidies Pursuant to the Procedures Contained  
in the General Council Decision in Document WT/L/691  
 
JAMAICA 
   The following notification, dated 30 June 2009, is being circulated at the request of the Delegation of Jamaica.   
 
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  Pursuant to the procedures contained in the General Council Decision in document 
WT/L/691, Jamaica hereby submits the followi ng updating notification for 2008 to enable the 
Committee to conduct its annual review of complianc e of the standstill and transparency requirements 
as under the Decision.    A. E
XPORT INDUSTRY ENCOURAGEMENT ACT 
1. Description of Programme  
 
 The Export Industry Encouragement Act was established as an incentiv e framework geared 
toward the encouragement of export industries.    2. Period Covered by Notification
 
 
 Programme description for the calendar year 2008.    3. Policy Objective and/or Purpose of the Subsidy
 
 
 The objective is to encourage investment and growth in export manufacturing industries.   G/SCM/N/186/JAM 
G/SCM/N/192/JAM Page 2 
 
 
  4. Background and Authority of the Subsidy
 
  Law 49 of 1956  Law 13 of 1960 
 Act 11 of 1968  
 Act 42 of 1969   Act 56 of 1974  5. Form of the Subsidy
 
 
 Companies that export 100 per cent output to hard currency markets outside of CARICOM are exempt from income tax on profits and fu ll exemption from import duties on capital goods and 
raw materials for use by the approved exporter in the production process.    
 Partial exporters (companies exporting less th an 100 per cent of output) are entitled to an 
export allowance that may be deducted from taxable income with the level of tax relief linked to 
exports.    6. To Whom and How the Subsidy is Provided
 
 
 Any company registered or incorporated in Jamaica and whose products are exclusively for 
sale to hard currency markets outside of CARICOM is  eligible to a tax holiday on profits earned from 
the manufacture of the approved product as well as duty-free importation of raw material and capital 
goods for use in the production process.    
 The company must be declared an "approved export manufacturer" in relation to an 
"approved export product" by the Minister of Indus try.  Having a product designated an approved 
product and the company an approved export manufact urer entitles the company to income tax and 
duty benefits as outlined above.     Partial exporters (companies exporting less th an 100 per cent of output) are entitled to an 
export allowance as described at paragraph 5 above.   To benefit from the allowance, a 5 per cent 
threshold of export sales to total sales must apply and exports must be to markets outside of the 
CARICOM region.    7. Subsidy Per Unit
 
 
 Estimated revenue foregone as a result of relief under the programme was US$1.1m.   
 8. Duration of the Subsidy
 
  Tax and duty benefits are allowed for a period of up to ten (10) years.   
 
9. Statistical Data on the Impact of the Programme
 
  Historically, the programme has contributed to  significant growth in exports of the non-
traditional manufacturing sub-sectors (apparel, leather,  plastic).  This remains an important incentive 
programme for manufacturing companies wishing to export to third country markets.  
Five hundred (500) persons were employed under th is programme during the period under review.    G/SCM/N/186/JAM 
 G/SCM/N/192/JAM 
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  B. JAMAICA EXPORT FREE ZONES ACT 
1. Description of the Programme  
  The Jamaica Export Free Zones Act provides an  incentive and regulatory framework for the 
operation of Free Zones in Jamaica.   
 2. Period Covered by the Notification
 
  Programme description for the calendar year 2008.   
 
3. Policy Objective and/or Purpose of the Subsidy
 
  The objective is to encourage investment, expor ts and foreign exchange earnings and to create 
employment opportunities.   
 
4. Background and Authority for the Subsidy
 
  Act No. 18 of 1982  Act No. 12 of 1985  Act No. 16 of 1991 
 Act No. 24 of 1996 
 5. Form of the Subsidy
 
  Approved Free Zone enterprises are entitled to:   
 
• Duty-free importation of capital goods, consumer goods, raw materials or articles for use in 
connection with the approved product;   
• Duty-free treatment of articles for the constructi on, alteration, and repa ir of equipment of 
premises in the Free Zones;   
• Total relief from income tax in respect of prof its or gains earned from approved activities;   
• Repatriation of profits (since liberalization of the foreign exchange market in 1991 there are 
no restrictions on the repatriation of profits);    
• Exemption from the normal fees payable with respect to work permits.   
 
6. To Whom and How the Subsidy is Provided
 
  Companies approved to operate in the Free Zone s must be registered or incorporated in 
Jamaica under the Companies Act to carry out an y of the following prescribed activities:   
 
• warehousing and storing 
• manufacturing operations 
• transshipment operations 
• loading and unloading operations 
• exporting 
• importing 
• service operations, including banking, data processing and telemarketing, insurance, 
professional services G/SCM/N/186/JAM 
G/SCM/N/192/JAM Page 4 
 
 
  • packing and shipping 
• assembling 
• processing, refining, purifying, mixing, merchandising 
  Approvals for free zone status are made by the Minister of Industry on the recommendation of 
the Free Zone Council, the regulatory body appointed to supervise the operations of the Free Zones.   
 
 By policy decision of April 1997, Free Zone manufacturing entities are allowed to sell up to 
15 per cent of output on the local market.  Free Zone goods sold onto the local market are subject to the applicable duties and charges.    7. Subsidy Per Unit
 
 
 The estimated revenue foregone as a result of relief under this programme was US$4.7m.   
 8. Duration of the Subsidy
 
 
 Incentives granted to Free Zone entities are for an indefinite period.   
 9. Statistical Data on the Impact of the Programme
 
  This programme continues to be a critical fa ctor in Jamaica's economic development.  The 
number of persons employed in the free zones currently  stands at over 4,000 and the programme plays 
an important support role in Jamaica's investment pr omotion and domestic capacity building efforts.   
 C. I
NDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION ) ACT 
1. Description of Programme  
 
 Provides an enabling framework for the pr ovision of factory space in Jamaica.   
 2. Period covered by Notification
 
  Programme description for the calendar year 2008.   
 
3. Policy objective and Purpose of the Subsidy
 
  To facilitate and encourage the construction of factories in Jamaica.    4. Background and Authority of the Subsidy
 
 
 Law 9 of 1961  Law 30 of 1961  Act 23 of 1972  G/SCM/N/186/JAM 
 G/SCM/N/192/JAM 
 Page 5 
 
 
  5. Form of the Subsidy  
  An approved builder under the Industrial Incen tives Factory Construction Act is entitled to:   
 
• Duty-free importation of items or articles for factory construction;   
• Enter into an agreement with a recognized enterprise for the lease of the factory;   
• Be granted relief from income tax for 15 years in respect of income from the lease of the 
factory or from profits made upon its sale.   
 6. To Whom and How the Subsidy is Provided
 
  Approved builders are granted a licence by the Mi nister of Industry to construct factories.  
Approved builders providing factory space for compan ies having recognized status - i.e. status under 
the Export Industry Encouragement Act (EIEA) or the Industrial Incentives Act (IIA) - can qualify for 
the incentives mentioned above.  Free Zone developers are also eligible for incentives under the Act.   
 7. Subsidy Per Unit
 
 
 There are very few beneficiaries under the pr ogramme.  Revenue foregone  is negligible.   
 8. Duration of the Subsidy
 
 
 Income Tax Relief is available for fifteen (15) years in respect of income from the lease of the 
factory or from profits made upon its sale.    9. Statistical Data on the Impact of the Programme
 
  Please see section 7 above.   
 
D. F
OREIGN SALES CORPORATION ACT 
1. Description of the Programme  
  A legislative framework for the operation of Fore ign Sales Corporation (FSCs) in Jamaica.   
 
2. Period covered by the notification
 
  Programme description for the calendar year 2008.    3. Policy Objective and or Purpose of the Subsidy
 
 
 To attract foreign investment into the country  and to promote Jamaica as an attractive FSC 
location.    4. Background and Authority for the Subsidy
 
 
 In November 1984, Jamaica was certified as a qualifying Foreign Sales Corporation (FSC) 
jurisdiction and enabling legislation, the Foreign Sal es Corporation Act, was passed shortly thereafter.   G/SCM/N/186/JAM 
G/SCM/N/192/JAM Page 6 
 
 
  5. Form of the Subsidy
 
 
• FSCs are exempt from Jamaican Corporate Income  Tax on their foreign trade income as long 
as they remain designated.   
• No income tax is imposed in Jamaica on divi dends paid to foreign shareholders by a 
designated FSC. 
• Investment income or carrying changes earned by  an FSC are relieved from income taxes.   
• FSCs are entitled to import into Jamaica equipment, material and machinery free of all import 
duties.   
 6. To whom and how the subsidy is provided
 
 
 The Minister of Industry has the authority to grant certificates of designation to FSCs locating 
in Jamaica.  Incentives as outlined above are available to FSCs.   
 7. Subsidy per unit
 
  Revenue foregone is negligible as there are few beneficiaries under the regime.   
 
8. Duration of a Subsidy
 
  The life of the certificate is fifteen (15) years, but this may be renewed for a further fifteen (15) years if necessary.   
 
9. Statistical data on the impact of the programme
 
  Please see response at section 7 above.    10. Information referred to in Paragraph 2( a) of the General Council Decision of 2007
 
 
 The ministry responsible for the administration of the four (4) programmes, the Ministry of Industry, Investment and Commerce, has conducted consultations with the relevant stakeholders, 
including Jamaica's trade and investment promoti on agency, the private sector associations and the 
Ministry of Finance and the Public Service, which acts as the secretariat for the Tax Reform 
Committee, on the General Council Decision of 2007 contained in WT/L/691.   
  A priority area for the new political administrati on is the reform of the tax system focusing on 
its simplification and ensuring transparency in its  operation.  In this regard, the Tax Reform 
Committee has been reactivated to review the ove rall system of taxation, including the incentives 
schemes.  The Committee's work would include a review of the four (4) incentives programmes 
covered by this notification with a view to making them consistent with Jamaica's WTO obligations.   
  The beneficiaries under the programmes were  notified in writing in April 2008 that the 
programmes will not be provided beyond 31 Decem ber 2015 as set out in the General Council 
Decision.  New beneficiaries post-April 2008 were also  similarly notified in the Orders issued to them 
by the Minister of Industry, Investment and Commerce.   
  
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